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We Explain Bitcoin

You may have read or heard about Bitcoin here and there. But if you are still at a loss as to what Bitcoin is and how it works, then we explain Bitcoin here for you to have a better understanding of its nature, as well as its features and benefits to e-commerce and Internet banking.

While you can shop online using your credit card or the popular online payment service, PayPal, Bitcoin provides another mode of payment that is also secure and easy to use.

What is Bitcoin and How it Works

As we explain Bitcoin, it is best to get to know first how it came to exist and its journey towards its popularity today. It all started way back in 2008, built as an online payment that requires no central authority to operate. But what makes it unique is its peer-to-peer system of electronic payment, wherein no specific central person is in charge of the system.

Instead, it is an open source system managed by the individual members. Hence, any member can make changes or updates. However, changes are still voted for acceptance by the users, in order to keep the system in proper balance and order.

Another distinct feature is the opportunity for users to verify transactions and get rewards via Bitcoins for their computing contributions to the network. Hence, the system creates endless opportunities for earnings. The amount of Bitcoins that you can earn will depend on the computing power contributed to the network.

How to Get Bitcoin

In the real world, coins and bills are kept in the wallet for safekeeping and security. Likewise, to get started with Bitcoin, you need to have a wallet where you can deposit your Bitcoins, and store them for safekeeping, just like a bank account. Your wallet also lets you send or transfer Bitcoins to others, and use them to pay for online transactions.

Bitcoin wallet comes in two types; the web-based wallet and the software version. The good thing about the web-based application is that you can access your wallet anywhere, even if you don’t have your laptop with you. On the downside, there is risk in terms of security, just like any online banking prone to hacking.

This is where the software version addresses the security issue. But you have to install the program in your computer, and you can only access your wallet using your computer or mobile device. Either way, both types provide alternatives to fit your usage and Internet banking preferences.

Using Bitcoin in Internet Banking

To start doing online banking using Bitcoins, you need to first link your wallet with your bank account so that you can easily transfer funds to-and-fro. Once your wallet has sufficient funds, you can start shopping online and do business through the Internet.

Bitcoins are also used by investors for trading, where they can earn from the fluctuations of Bitcoin values, just like Forex Exchange. Similarly, there are Bitcoin exchanges around where you can setup an account and trade. This is a good way to make money while using your earnings for online transactions.

But you must be knowledgeable enough about the trends and market conditions in order to make any profit. Otherwise, you might end up on the losing end.